[blacksport]

Originally Posted by lurker

When going for total decontrol, why make the excuse for 2 weekly revision ? That itself is an opening for cheating public. Everybody and his dog knows that in 2 weeks oil prices will surely fluctuate. Surely it is a medium to fleece customers and benefit from cartelisation and monopolisation and I am sure the said govt of the day is in cahoots with these robber-barons because they get some kind of deficit-financing or some other shenanigans going from this fraudulent scheme.

Full decontrol should mean oil prices change everyday or once in 2 days. Full decontrol with fortnightly pricing is a sham that can be thought up only by some crooked Indian bureaucrat.

that is why it is a scam !

Nonsense. Prices are fixed for the next 15 days depending on the current price and the fluctuations during the preceding 15 days. That holds good both when prices go up or down. To prove otherwise, there is a need to quote supporting data.

Daily price revision is not practical. If done that way, expect to see fights at the filling station on the price of the day. Expect pump owners to cheat when price goes down. In the 15 day system, when the prices changes it gets wide publicity.

[lurker]

Originally Posted by blacksport

Prices are fixed for the next 15 days depending on the current price and the fluctuations during the preceding 15 days. That holds good both when prices go up or down. To prove otherwise, there is a need to quote supporting data.

Daily price revision is not practical. If done that way, expect to see fights at the filling station on the price of the day. Expect pump owners to cheat when price goes down. In the 15 day system, when the prices changes it gets wide publicity.

What hogwash ! If the system is so transparent, then where is ethics and integrity and why is there price gouging from consumers based on monopolisation and cartelisation. Why is there no genuine change in prices reflected by global fuel price fluctuations even after 2-4-6 week cycles.

Why are fuel companies so horribly corrupt ?

Anybody who genuinely defends these corrupt entities needs to do full disclosure to be taken credibly. Or else there is a bucket of salt always nearby.

Some of the densest rubbish I have read on this forum is from those who support this so-called decontrolling led by incorrigibly thick-skinned and corrupt beyond the darkest nightmare Indian oil and petrol companies.

[sandeep108]

The entire petroleum scenario in India is one big scam perpetrated by the government. It is like this: I levy 50% tax on say diesel whose cost to make is say Rs. 50/L. Now this makes the minimum price Rs. 75/L. I then fix the price at Rs. 60/L and then give subsidy to the OMCs of Rs. 15/L. I then cry about my huge subsidy bill and how diesel is necessary for the poor people of India and therefore I cannot raise its price.

Actually I am laughing all the way to the bank because I have made a cool profit of Rs. 10/L (Rs. 25 tax less Rs. 15 subsidy) and the poor people of India now love me for making diesel cheaper.

Now the even better part is how I want to cheat the poor people more - by crying more about the subsidy and how it is fuelling the deficit, inflation, etc. I now increase prices by Re. 0.50/L every month. Viola!!! The entire profit of Rs. 25/L now becomes mine.

Add to that the multitude of state tax, local tax, road tax, road cess, etc. And this is where the main stumbling block of GST is.

If the government actually wanted to benefit the people of India, all they have to do is reduce the plethora of taxes both types and rates, reduce the establishment that perpetuates this nonsense and strengthen the judiciary.

[blacksport]

Originally Posted by lurker

What hogwash ! If the system is so transparent, then where is ethics and integrity and why is there price gouging from consumers based on monopolisation and cartelisation. Why is there no genuine change in prices reflected by global fuel price fluctuations even after 2-4-6 week cycles.

Why are fuel companies so horribly corrupt ?

Anybody who genuinely defends these corrupt entities needs to do full disclosure to be taken credibly. Or else there is a bucket of salt always nearby.

Some of the densest rubbish I have read on this forum is from those who support this so-called decontrolling led by incorrigibly thick-skinned and corrupt beyond the darkest nightmare Indian oil and petrol companies.

I am sorry to say this, but, I tried hard to look for some data in your post, and among all the expletives, I found none. I am willing to listen to conspiracy theories, but some data would definitely help.

Originally Posted by blacksport

To prove otherwise, there is a need to quote supporting data.

[lurker]

The previous pages are all full of 'specific data' which you either did not bother to read through, or the more likely reason is that you want some new excuse of 'specific data' so that you can pick & choose to demolish some random strawman from posted data and re-claim some kind of credibility.

As previously said, you swim against the tide. So the onus is on you to come clean with full disclosure that you do not have any affiliation to Reliance, any other bogus corporate, Shell/Well, some corrupt OMC, random profiteer etc and give a convincing reason as to why you are so interested to PAY MORE at the petrol pump and help some corrupt OMC cook some books and book more profit. Or aid some already filthy rich corporate to make even more money on 'oh-so-noble' sounding excuse that

'Oil companies shall not bleeeeed'
'Oil companies can not bleeeed'

these worthies have never shed a tear for some human bleeding to death on the road are flowing with sympathy for some filthy company dealing with a mucky product like oil. Does it have any rationale. Does it make any sense whatsoever ? Only time when people make a hue and cry over protecting their sovereignty and protecting the profitability of something is when they themselves are profiting immensely from some clever scam or the other. In any case if they are so concerned about profitability of only some oil company. Then while we sing Jana Gana Mana, they should leave the space and sing something else like


Saare Jahan se achcha 'Indian Oil' hamaaraaa
Saare Jahan se achcha
Ham bulbule hain Bharat 4 kee
Yeh hydrocarbon hamaara hamaara ..

etc etc

Still since you talk so much about 'supporting data', a few crumbs need to be thrown in that direction as well.

1. 30% of crude is produced in India, this do not entail any import duty or dollar pricing at all. So that is a tiny scam. Landed cost of crude is misused thus in pricing. This is applied to even refined products produced in India.

2. INdia has 'OVER CAPACITY' in crude oil refining. If it is such an unprofitable business, will there even be over capacity in this industry. In manufacture/production, break-even point is a very important factor. But the break-even price of Crude is never mentioned. Above the break-even price the Refining Operation becomes untenable. As per Petrofed, CAPEX is on in India in Crude oil refining. One source mentions,250MMT Crude refining by 2020. How can this be, if the operation is NOT profitable ? So to continue this convenient scam, we have a clever term, 'under-recoveries'.

Under-recoveries,have been taking away huge chunks from the National Exchequer,from 2005,every year. The amount for the Fiscal 2011/12, was a whopping Rs 1,38,000 CRORES. Since this is IMAGINARY, where has this amount been going for the last 7 years, EVERY YEAR?

IT IS WORTH NOTING THAT,THE NATIONAL EXCHEQUER GAINS MORE BY WAY OF TAXES THAN THE “UNDER-RECOVERIES” OUTGO.

3. Indian PSU's are very old and have old P&M thus have very less amount set aside as Depreciation. Again contributing to huge profits. So another lie right there.

Also please take a lookie here. Advisor to Govt of India no less, but may not have any credibility in eyes of a OMC employess

http://www.business-standard.com/art...2200637_1.html

Here's an OMC employee making ridiculous claims against his own organization. Maybe he has an axe to grind.

http://indianexponent.com/40844/why-...rol-fraud.html

http://www.moneylife.in/article/kero...try/19690.html

Maybe they are all jealous of the success of OMC employees, their high salaries, or huge profits made by desi crony capitalists. So many people can't be true, can it ?

[StarScream]

Originally Posted by sandeep108

The entire petroleum scenario in India is one big scam perpetrated by the government. It is like this: I levy 50% tax on say diesel whose cost to make is say Rs. 50/L. Now this makes the minimum price Rs. 75/L. I then fix the price at Rs. 60/L and then give subsidy to the OMCs of Rs. 15/L. I then cry about my huge subsidy bill and how diesel is necessary for the poor people of India and therefore I cannot raise its price.

Actually I am laughing all the way to the bank because I have made a cool profit of Rs. 10/L (Rs. 25 tax less Rs. 15 subsidy) and the poor people of India now love me for making diesel cheaper.

Now the even better part is how I want to cheat the poor people more - by crying more about the subsidy and how it is fuelling the deficit, inflation, etc. I now increase prices by Re. 0.50/L every month. Viola!!! The entire profit of Rs. 25/L now becomes mine.

Add to that the multitude of state tax, local tax, road tax, road cess, etc. And this is where the main stumbling block of GST is.

If the government actually wanted to benefit the people of India, all they have to do is reduce the plethora of taxes both types and rates, reduce the establishment that perpetuates this nonsense and strengthen the judiciary.

I have three questions for the very learned folks here regarding the great Indian oil scam:

1. If it's all accounting gimmickry, then why would the government bother compensating the OMCs with oil bonds?
2. If it was all accounting gimmickry, why would the government run massive fiscal deficits that have the corresponding effects of lowering growth and lower sovereign ratings?
3. If oil retailing was such a lucrative business then why have the "robber barons" of Reliance and Essar stayed away from the business?

Originally Posted by lurker

1. 30% of crude is produced in India, this do not entail any import duty or dollar pricing at all. So that is a tiny scam. Landed cost of crude is misused thus in pricing. This is applied to even refined products produced in India.

I'm sorry but you're wrong on multiple counts there. India produced 24% of its crude. According to the BP Statistical Review, India produced 894,000 barrels a day of oil at the end of 2013. It consumed 3.7 million barrels/day.

The locally-produced crude is paid for in dollars and is benchmarked to an equivalent grade of global crude. For example, ONGC's Bombay High is benchmarked to prices for Nigeria's Bonny Light and Cairn's Rajasthan field is benchmarked to Indonesia's Tapis. So locally-produced crude is affected by both the exchange rate and global prices.

Local crude doesn't attract import duty but that doesn't matter because crude attracts zero import duty anyhow. So that only leaves a difference in freight costs.

[sandeep108]

Originally Posted by StarScream

I have three questions for the very learned folks here regarding the great Indian oil scam:

1. If it's all accounting gimmickry, then why would the government bother compensating the OMCs with oil bonds?
2. If it was all accounting gimmickry, why would the government run massive fiscal deficits that have the corresponding effects of lowering growth and lower sovereign ratings?
3. If oil retailing was such a lucrative business then why have the "robber barons" of Reliance and Essar stayed away from the business?

This is the last I will post in response to you, since you seem to have some great blinkers or you are part of the scam anyway.

1. Because the government hived off all these guys into separate listed companies.
2. Because the deficits have nothing much actually to do with the so called oil subsidies if oil taxes / subsidies are correctly net-off. The deficits are to do with the huge establishment cost - more than 70%, interest on the huge borrowings and all the giveaways in the name of socialism, e.g. Rs. 70,000 cr was given away in one year alone by Chidambaram as loan waiver to the 'poor' farmers. Most of this actually never reaches the intended recipients anyway as various studies have shown.
3. The oil PSUs are not pure retailing companies. Also AFAIK, the government refused to subsidise diesel sold by the private retailers. Private retailers cannot live on bonds in lieu of cash.

[blacksport]

Originally Posted by lurker

Still since you talk so much about 'supporting data', a few crumbs need to be thrown in that direction as well.

If you said all that to prove that the OMCs make profit, you needn't have bothered. You could have just quoted from their annual reports. Any PLC is there to make profits, and if not, investors like me would move elsewhere. Profit margin of Indian Oil Corporation is 1.47% in 2014, which is minuscule and the only saving grace for them is that they have a high turnover. To get a picture right, compare that with a company like Infosys whose net profit margin is about 20%. Remember, these companies compete each other for my investment.

People who think that they can run "less greedy" corporations should start one and show the way. And people who think that they can run the country better should join politics. We need people like you.

[lurker]

Originally Posted by StarScream

I'm sorry but you're wrong on multiple counts there. India produced 24% of its crude. According to the BP Statistical Review, India produced 894,000 barrels a day of oil at the end of 2013. It consumed 3.7 million barrels/day.

Ok, and who told you that the local production is only 24% and not 30%. The same OMC that told you that they had enormous under recoveries and were bleeding under massive debt yet kept increasing capacity against all conventional wisdom. Or is it the same Govt of India that almost lost a leg due to 'bleeding oil companies' and were saved in the nick of time.

If you believe that crap, then pls do believe in 30% also. In any case you must have come across these gems:

Statistics hide more than they reveal.

Statistics are like a miniskirt, what they hide is far more important than what they reveal.

The locally-produced crude is paid for in dollars and is benchmarked to an equivalent grade of global crude.

Why ? Who asked them to benchmark locally-produced crude to dollar prices ?

Who is the brainwave behind this scam ? Was permission taken from the Indian public to benchmark what they own in dollars ? Whose father died and Indian OMC appropriated the right to benchmark LOCAL CRUDE IN DOLLARS ?

Please question these corrupt practices instead of supporting such horse-manure and serving it as justification for OMC's.

Local crude doesn't attract import duty but that doesn't matter because crude attracts zero import duty anyhow. So that only leaves a difference in freight costs.

Does crude imported by private refineries too not attract import duty. Then that is another scam right there !

[lurker]

Originally Posted by blacksport

If you said all that to prove that the OMCs make profit, you needn't have bothered. You could have just quoted from their annual reports. Any PLC is there to make profits, and if not, investors like me would move elsewhere. Profit margin of Indian Oil Corporation is 1.47% in 2014, which is minuscule and the only saving grace for them is that they have a high turnover. To get a picture right, compare that with a company like Infosys whose net profit margin is about 20%. Remember, these companies compete each other for my investment.

People who think that they can run "less greedy" corporations should start one and show the way. And people who think that they can run the country better should join politics. We need people like you.

Get off the gravy train and think like a common man. Otherwise all is maya, everyone is jealous of you or your OMC's. A man who rides into a petrol pump on a luna or moped and shuffles around with Rs. 50 note to pay for petrol worth 50 bucks still brings a tear to eyes. There are such people around too. Not everyone travels in X1/X3/A6/ML/GL320 you know.

[blacksport]

Originally Posted by lurker

Get off the gravy train and think like a common man. Otherwise all is maya, everyone is jealous of you or your OMC's. A man who rides into a petrol pump on a luna or moped and shuffles around with Rs. 50 note to pay for petrol worth 50 bucks still brings a tear to eyes. There are such people around too. Not everyone travels in X1/X3/A6/ML/GL320 you know.

Good! We are closing in. 1.47% profit margin means, they make 1.47 rupees profit for every 100 rupees of fuel sold. That is Rs 1 per liter of petrol, 90ps for diesel. Where is the scam?

Now, if you want to shift the blame to the taxes, blame the govt, not the OMCs.

[lurker]

Who is this royal 'we' ?

[blacksport]

Originally Posted by lurker

Who is this royal 'we' ?

Sure we will get to that. Where is the scam? Or was it all maya?

[lurker]

Originally Posted by blacksport

Sure we will get to that. Where is the scam? Or was it all maya?

Definitely this is a new situation. Maybe it is better to pretend to lie sleeping with eyes wide open. Try it !

[StarScream]

Originally Posted by sandeep108

This is the last I will post in response to you, since you seem to have some great blinkers or you are part of the scam anyway.

1. Because the government hived off all these guys into separate listed companies.
2. Because the deficits have nothing much actually to do with the so called oil subsidies if oil taxes / subsidies are correctly net-off. The deficits are to do with the huge establishment cost - more than 70%, interest on the huge borrowings and all the giveaways in the name of socialism, e.g. Rs. 70,000 cr was given away in one year alone by Chidambaram as loan waiver to the 'poor' farmers. Most of this actually never reaches the intended recipients anyway as various studies have shown.
3. The oil PSUs are not pure retailing companies. Also AFAIK, the government refused to subsidise diesel sold by the private retailers. Private retailers cannot live on bonds in lieu of cash.

Sandeep, I'm so sorry to have upset you - entirely my fault. But rather than getting personal, let's deal with facts.
1. The govt gave them oil bonds because it hived them off? I don't understand that.
2. "deficits have nothing much actually to do with the so called oil subsidies" - Fact is that oil subsidies accounted for 16% of the deficit last year. Is that a small number?
3. Again, if oil pricing is all accounting gimmickry, then why should subsidy on diesel matter for a Reliance or an Essar? Why would they need bonds at all, because its all a scam and in reality a very lucrative business, according to you.

Originally Posted by lurker

Ok, and who told you that the local production is only 24% and not 30%. The same OMC that told you that they had enormous under recoveries and were bleeding under massive debt yet kept increasing capacity against all conventional wisdom. Or is it the same Govt of India that almost lost a leg due to 'bleeding oil companies' and were saved in the nick of time.

lurker, we've encountered each other before, haven't we? And like last time you still shoot without looking and sidestep real tangible facts. Who told me what percentage of India's oil consumption is our production? Let's look at my answer carefully. Was it the OMCs? No. Was it the government? No. It was the BP Statistical Review, only the most credible source of oil data in the world and with numbers to back it up!

But knowing your penchant for not letting the facts get in the way of a good argument, I'm sure it's a source you don't regard highly.